Issue 14.10
When my oldest son was a young boy,he was convinced mom and dad wouldn’t notice if he only snuck 1 or 2 candies out of our candy dish. The problem with his theory was that mom and dad never ate the candy and noticed that the candy supply was shrinking over time. By the time I’d noticed,he had emptied almost the entire candy dish. I remember trying to instill the lesson and learning it myself – small amounts add up to much larger amounts over time. I was reminded of this story because I recently read an article on Yahoo! Finance that as of March 15,2010 the Social Security Administration (SSA) is now paying out more in benefits than it is bringing in from taxes. For over 20 years,regardless of which president held office or which governmental party held seats in Congress,the government has been accused of taking funds from Social Security to pay for other programs. For the first time since the 80s,Social Security is going to pay out more than will come in – an estimated $39 million in 2010 and more than $29 billion over several years. The federal government has borrowed $2.5 trillion from the SSA and now they have reason to claim those IOUs. This may force our government to borrow more money which may create more tax increases. The SSA claims that current benefits won’t be affected,but economic experts believe that the program’s finances are beginning to fall apart and they predict that the SSA will have drained its funds by 2037 unless Congress steps in and makes changes. This means that benefits could possibly be reduced for our children and grandchildren.
Our government still needs to learn the lesson that small amounts we take here or there will add up. As a financial advisor,I believe it’s now more important than ever to protect your investments and savings from higher taxes,market losses and get a fair return.
